Question3: International trade can be explained by a number of models to explain the benefits of trade for nations. Use the case study provided to you to answer the questions that follow.

Question 3                                                                                                                  (7 Marks)

International trade can be explained by a number of models to explain the benefits of trade for nations. Use the case study provided to you to answer the questions that follow.

  1. Examine the relevance of the following theories to explain the reasons why Coca Cola and other multinational enterprises trade internationaly.
  2. Absolute Advantage                                                                                                 2 marks
  3. The Ricardian Model                                                                                                1 mark
  4. The Heckscher-Ohlin Model 1 mark
  5. Examine the differences between the theory of Absolute Advantage and Comparative advantage. 1 mark
  6. Explain the main disadvantages of the theory of comparative advantage. 2 marks

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